Coronavirus Job Retention Scheme guidance hub for employers and employees

*Update: The scheme has been extended until the end of October. There will be no changes to the scheme until the end of July. Government guidance has been updated  to reflect that from August, employers currently using the scheme will have more flexibility to bring their furloughed employees back to work part time whilst still receiving support from the scheme. Employers will be asked to pay a percentage towards the salaries of their furloughed staff in a shared approach that will still maintain 80% support.*

The Coronavirus Job Retention Scheme is a temporary scheme in place for 4 months (extended by a month on 17 April) starting from 1 March 2020, but it may be extended if necessary and employers can use this scheme anytime during this period.

It is designed to help employers whose operations have been severely affected by COVID-19 to retain their employees and protect the UK economy. However, all employers are eligible to claim under the scheme and the government recognises different businesses will face different impacts from coronavirus.

If employers cannot maintain their current workforce because your operations have been severely affected by coronavirus (COVID-19), they can furlough employees and apply for a grant that covers 80% of their usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and pension contributions (up to the level of the minimum automatic enrolment employer pension contribution) on that subsidised furlough pay.

The Government launched the portal on 20 April 2020 and expects that payments will be made within 6 working days. The claim will need to be made online and will be accessed through the Government Gateway. Your payroll agent may be able to make the claim for you.

CTG’s Coronavirus Job Retention Scheme guidance hub collates and reproduces:

  • Link to the online portal to claim under the Scheme (launched on 20 April – We understand that applications need to be completed in one session and will time out after 30 minutes of inactivity. Also there will be no e-mail confirmation so take a screenshot/print the confirmation and make sure you retain calculation information in case HMRC needs to review it in future. To access the system on GOV.UK you or your agent will need to have: A Government Gateway ID and password and an active PAYE enrolment. If you do not have these, you can register for them at HMRC services: register and PAYE Online for employers. You may need to access the link via guidance for it to work – click on the green “Claim now” button on this page.
  • HMRC guidance for UK employers (last updated on 23 April to reflect the scheme extension, fraud, claims for employees you made redundant or who stopped working for you, fixed term contracts, agency workers and retaining records. Also, a new guide has been published with information on holiday pay, employees returning from family-related statutory leave and sick pay, how to treat grant payments in Real Time Information. Plus, more information on how to calculate the claim for 80% of your employees’ wages, how much you can claim for National Insurance and pension contributions and how to claim. Also arrangements relating to agreements with trade unions)
  • HMRC Coronavirus Job Retention Scheme calculator (launched on 20 April – Use this calculator to work out the figures you’ll need when you complete an online claim through the scheme. It’s aimed at organisations with a small number of employees. At the moment, it will work for most employees who are paid the same amount each pay period (for example, weekly or monthly). It won’t work for employees who:
    • receive any top-up pay in the claim period
    • returned from statutory leave such as maternity leave in the last three months
    • get director’s payments have been transferred under TUPE
    • have been employed at separate times throughout the year
    • receive employer pension contributions outside of an auto-enrolment pension scheme

HMRC is working enhance the calculator to include these scenarios as soon as possible. If you cannot use this calculator, work out what you can claim manually using the calculation guidance or seek professional advice. It’s your responsibility to check that the amount you’re claiming for is correct.)

  • HMRC Step by Step guidance for employers claiming under the Job Retention Scheme (published 17 April, outlining five key steps 1) Essential information 2) Before you make your claim 3) Calculating your claim 4) Making a claim 5) What to do next. Useful new information includes the fact that applications need to be completed in one session and will time out after 30 minutes of inactivity. Also there will be no e-mail confirmation so take a screenshot/print the confirmation and make sure you retain calculation information in case HMRC needs to review it in future)
  • HMRC guidance for employees (last updated on 23 April. Recent updates include new information on how to report fraud or abuse of the scheme, fixed term contracts, holiday pay, returning from family related statutory leave, sick pay and agency workers. Also arrangements relating to agreements with trade unions).

HMRC will check claims made through the scheme. Payments may be withheld or need to be repaid in full to HMRC if the claim is based on dishonest or inaccurate information or found to be fraudulent. Dishonest or deliberately fraudulent claims put our essential public services and the protection of livelihoods at risk during these challenging times. HMRC has put in place an online portal for employees and the public to report suspected fraud in the Coronavirus Job Retention Scheme.

The first payments under the Job Retention Scheme are now being paid. If your charity has made a claim for furloughed workers, we would welcome feedback on your experience at [email protected]. Recent updates and developments to note include:

  • HMRC e-mail: HMRC has circulated an e-mail to stakeholders with information for those still to make a claim (including a link to guidance) and those waiting on a claim to be paid (don’t chase if not yet received). Organisations are encouraged to retain all calculation information for claims and to beware of scams
  • Parental leave: DWP has confirmed that furloughed workers planning to take paid parental or adoption leave will be entitled to pay based on their usual earnings rather than a furloughed pay rate.
  • Employment Allowance: A reminder that if your charity receives the Employment Allowance, this should be used up before any claims for Employer’s National Insurance is claimed under the Job Retention Scheme. This Twitter exchange provides some useful background to this point.
  • Claiming for more than 100 furloughed employees: HMRC guidance has been updated with information about how to claim for 100 or more furloughed employees. You’ll need ensure that you:
    • provide only the employee information requested here – if you provide more or less information than required, you may risk delaying your payment and/or be asked to provide the information again
    • submit one line per employee for the whole period
    • do not break break up the calculation into multiple periods within the claim
    • do not split data by contract type
    • upload your file as an .xls, .xssx, .csv or .ods
  • Bank accounts: Guidance has been updated to remind claimants that when making a claim they should only provide bank account details where a BACS payment can be accepted.
  • Using an agent to do PAYE online: If you use an agent who is authorised to do PAYE online for you, they will be able to claim on your behalf. If you would like to use an agent, but do not have one authorised to do PAYE online for you, you can do that by accessing your HMRC online services and selecting ‘Manage Account’. You must be enrolled in PAYE online for employers to do this and will need to ask your agent for their agent ID. Your agent can get this from their HMRC online service for agents by selecting ‘authorise client.’ You can also use this service to remove authorisation from your agent if you do not want it to continue after they have submitted your claim(s). If an agent makes a claim on your behalf you will need to tell them which bank account you would like the grant to be paid into.
  • Claim Calculator: The Job Retention Scheme calculator can now be used to work out what you can claim for most employees who are paid either regular or variable amounts each pay period (for example, weekly or monthly). The exceptions to this are if employees: receive any top-up pay in the claim period; returned from statutory leave such as maternity leave in the last three months; get director’s payments; have been transferred under TUPE; have been employed at separate times throughout the year; receive employer pension contributions outside of an auto-enrolment pension scheme; receive any discretionary payments in the pay periods you are claiming for.

Guidance for Employers

Who can claim

Any UK organisation with employees can apply, including businesses, charities, recruitment agencies and public authorities. You must have:

  • created and started a PAYE payroll scheme on or before 19 March 2020
  • enrolled for PAYE online – this can take up to 10 days
  • a UK bank account.

Apprentices

Apprentices can be furloughed in the same way as other employees and they can continue to train whilst furloughed. However, you must pay your Apprentices at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage (AMW/NLW/NMW) as appropriate for all the time they spend training. This means you must cover any shortfall between the amount you can claim for their wages through this scheme and their appropriate minimum wage. Guidance is available for changes in apprenticeship learning arrangements because of COVID-19.

Public sector organisations

The government expects that the scheme will not be used by many public sector organisations, as the majority of public sector employees are continuing to provide essential public services or contribute to the response to the coronavirus outbreak. Where employers receive public funding for staff costs, and that funding is continuing, we expect employers to use that money to continue to pay staff in the usual fashion – and correspondingly not furlough them. This also applies to non-public sector employers who receive public funding for staff costs. Organisations who are receiving public funding specifically to provide services necessary to respond to COVID-19 are not expected to furlough staff. In a small number of cases, for example where organisations are not primarily funded by the government and whose staff cannot be redeployed to assist with the coronavirus response, the scheme may be appropriate for some staff.

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*CTG Comment [NB This is not in the HMRC guidance]* DCMS has provided additional details on circumstances in which organisations in receipt of public funding can furlough staff under the Scheme. This information was sourced by the charity Community Leisure UK, following support from CTG and other sector bodies: “DCMS has been liaising closely with the Treasury and I can confirm that all UK-wide employers with a PAYE scheme are eligible for the Coronavirus Job Retention Scheme, this includes the public sector and charities. Employees can be on any type of contract, including zero-hour or temporary. If the funding for an organisation comes from a number of sources a judgement needs to be made on what that funding is for. If public sector funding explicitly covers staffing costs, then the money still exists to pay for staff and there is no need to furlough. If it does not cover staffing costs the organisation can furlough. Responsibility for that decision lies with the Accounting Officer of the organisation who pays the public funds so that they are clear there is no duplication“. The Arts Council has also published specific guidance for National Portfolio Organisations.  DfE has also published “COVID19: financial support for education, early years & children’s social care” including commentary on when it is  appropriate for schools/HE sector etc to use the Job Retention Scheme.

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Individuals

Individuals can furlough employees such as nannies provided they pay them through PAYE and they were on their payroll on, or before, 19 March 2020.

Administrators

Where a company is being taken under the management of an administrator, the administrator will be able to access the Job Retention Scheme. However, we would expect an administrator would only access the scheme if there is a reasonable likelihood of rehiring the workers. For instance, this could be as a result of an administration and pursuit of a sale of the business.

Employees you can claim for

You can only claim for furloughed employees that were on your PAYE payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020. Employees that were employed as of 28 February 2020 and on payroll (i.e. notified to HMRC on an RTI submission on or before 28 February) and were made redundant or stopped working for the employer after that and prior to 19 March 2020, can also qualify for the scheme if the employer re-employs them and puts them on furlough.

Employees can be on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts. Foreign nationals are eligible to be furloughed. Grants under the scheme are not counted as ‘access to public funds’, and you can furlough employees on all categories of visa. To be eligible for the grant, when on furlough, an employee cannot undertake work for, or on behalf, of the organisation. This includes providing services or generating revenue. Employers are free to consider allocating any critical business tasks to staff that are not furloughed. While on furlough, the employee’s wage will be subject to usual income tax and other deductions.

If you made employees redundant or they stopped working for you after 28 February

If you made employees redundant, or they stopped working for you on or after 28 February 2020, you can re-employ them, put them on furlough and claim for their wages through the scheme. This applies to employees that were made redundant or stopped working for you after 28 February, even if you do not re-employ them until after 19 March. This applies as long as the employee was on your payroll as at 28 February and had been notified to HMRC on an RTI submission on or before 28 February 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 28 February 2020

If your employee stopped working for you and was on a fixed term contract, you should also refer to the section ‘If your employee is on a fixed term contract’ below.

If you made employees redundant or they stopped working for you after 19 March 2020

If you made employees redundant, or they stopped working for you on or after 19 March 2020, you can re-employ them, put them on furlough and claim for their wages through the scheme from the date on which you furloughed them.

This applies as long as the employee was employed on 19 March 2020 and was on your PAYE payroll on or before 19 March 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020.

If your employee stopped working for you and was on a fixed term contract, you should also refer to the section ‘If your employee is on a fixed term contract’ below.

If your employee is on a fixed term contract

An employee on a fixed term contract can be re-employed, furloughed and claimed for if either:

  • their contract expired after 28 February 2020 and an RTI payment submission for the employee was notified to HMRC on or before 28 February 2020
  • their contract expired after 19 March 2020 and an RTI payment submission for the employee was notified to HMRC on or before 19 March 2020

If the employee’s fixed term contract has not already expired, it can be extended, or renewed. You can claim for them if an RTI payment submission for the employee was notified to HMRC on or before 19 March 2020.

Employees that started and ended the same contract between 28 February 2020 and 19 March 2020 will not qualify for this scheme. This is not specific to employees on fixed-term contracts, the same would apply to employees on all other contracts.

If your employee had multiple employers over the last year

If an employee has had multiple employers over the past year, has only worked for one of them at any one time, and is being furloughed by their current employer, their former employer/s should not re-employ them, put them on furlough and claim for their wages through the scheme.

If your employees are working reduced hours

If an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme.

If your employee is on unpaid leave

If an employee started unpaid leave after 28 February 2020, you can put them on furlough instead. If you put them on furlough then you should pay them at least 80% of their regular wages, up to the monthly cap of £2,500. If an employee went on unpaid leave on or before 28 February, you cannot furlough them until the date on which it was agreed they would return from unpaid leave.

If your employee is self-isolating or on sick leave

If your employee is on sick leave or self-isolating as a result of Coronavirus, they’ll be able to get Statutory Sick Pay, subject to other eligibility conditions applying. The Coronavirus Job Retention Scheme is not intended for short-term absences from work due to sickness, and there is a 3 week minimum furlough period.

Short term illness/self-isolation should not be a consideration in deciding whether to furlough an employee. If, however, employers want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees. In these cases, the employee should no longer receive sick pay and would be classified as a furloughed employee.

Employers are also entitled to furlough employees who are being shielded or off on long-term sick leave. It is up to employers to decide whether to furlough these employees. You can claim back from both the Coronavirus Job Retention Scheme and the SSP rebate scheme for the same employee but not for the same period of time. When an employee is on furlough, you can only reclaim expenditure through the Coronavirus Job Retention Scheme, and not the SSP rebate scheme. If a non-furloughed employee becomes ill, needs to self-isolate or be shielded, then you might qualify for the SSP rebate scheme, enabling you to claim up to two weeks of SSP per employee.

If your employee becomes sick while furloughed

Furloughed employee retain their statutory rights, including their right to Statutory Sick Pay. This means that furloughed employees who become ill must be paid at least Statutory Sick Pay. It is up to employers to decide whether to move these employees onto Statutory Sick Pay or to keep them on furlough, at their furloughed rate.

If a furloughed employee who becomes sick is moved onto SSP, employers can no longer claim for the furloughed salary. Employers are required to pay SSP themselves, although may qualify for a rebate for up to 2 weeks of SSP. If employers keep the sick furloughed employee on the furloughed rate, they remain eligible to claim for these costs through the furloughed scheme.

Shielding Employees

Employees who are unable to work because they are shielding in line with public health guidance (or need to stay home with someone who is shielding) can be furloughed.

Employees with caring responsibilities

Employees who are unable to work because they have caring responsibilities resulting from coronavirus (COVID-19) can be furloughed. For example, employees that need to look after children can be furloughed.

If your employee has more than one job

If your employee has more than one employer they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually. Employees can be furloughed in one job and receive a furloughed payment but continue working for another employer and receive their normal wages.

If your employee is on a fixed term contract

Employees on fixed term contracts can be furloughed. Their contracts can be renewed or extended during the furlough period without breaking the terms of the scheme. Where a fixed term employee’s contract ends because it is not extended or renewed you will no longer be able claim grant for them.

Eligible individuals who are not employees

As well as employees, the grant can be claimed for any of the following groups, if they are paid via PAYE:  office holders (including company directors); salaried members of Limited Liability Partnerships (LLPs); agency workers (including those employed by umbrella companies); limb (b) workers.

The guidance below sets out specific considerations for those individuals who are paid via PAYE, but who are not necessarily employees in employment law. Unless explicitly set out below, all other guidance is applicable to these cases, and should be followed.

Office Holders

Office holders can be furloughed and receive support through this scheme. The furlough, and any ongoing payment during furlough, will need to be agreed between the office holder and the party who operates PAYE on the income they receive for holding their office. Where the office holder is a company director or member of a Limited Liability Partnership (LLP), the furlough arrangements should be adopted formally as a decision of the company or LLP.

Company Directors

As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duties to their company which are set out in the Companies Act 2006. Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned. Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company. This also applies to salaried individuals who are directors of their own personal service company (PSC).

Salaried Members of Limited Liability Partnerships (LLPs)

Members of LLPs who are designated as employees for tax purposes (‘salaried members’) under the Income Tax (Trading and Other Income) Act (ITTOIA) 2005 are eligible to be furloughed and receive support through this scheme. The rights and duties of a member of an LLP are set out in an LLP agreement and in the absence of an agreement, default provisions in the LLP Act 2000, based upon company and partnership law. Such an agreement may include separate agreement between the LLP and an individual member setting out the terms applicable to that member’s relationship with the LLP. To furlough a member, the terms of the LLP agreement (or any such agreement between the LLP and the member) may need to be varied by a formal decision of the LLP, for example to reflect the fact that the member will perform no work in the LLP for the period of furlough, and the effect of this on their remuneration from the LLP. For an LLP member who is treated as being employed by the LLP (in accordance with s863A of ITTOIA 2005), the reference salary for this scheme is the LLP member’s profit allocation, excluding any amounts which are determined by the LLP member’s performance, or the overall performance of the LLP.

Agency Workers (including those employed by umbrella companies)

Where agency workers are paid through PAYE, they are eligible to be furloughed and receive support through this scheme, including where they are employed by umbrella companies. Furlough should be agreed between the agency, as the deemed employer, and the worker, though it would be advised to discuss the need to furlough with any end clients involved. As with employees, agency workers should perform no work for, through or on behalf of the agency that has furloughed them while they are furloughed, including for the agency’s clients. Where an agency supplies clients with workers who are employed by an umbrella company that operates the PAYE, it will be for the umbrella company and the worker to agree whether to furlough the worker or not.

Limb (b) Workers

Where Limb (b) Workers are paid through PAYE, they can be furloughed and receive support through this scheme. Those who pay tax on their trading profits through Income Tax Self-Assessment, may instead be eligible for the Self-Employed Income Support Scheme (SEISS), announced by the Chancellor on 26 March 2020. Read more information on the Self-Employed Income Support Scheme, including eligibility criteria and how to claim.

Contingent workers in the public sector

The Cabinet Office has issued guidance on how payments to suppliers of contingent workers impacted by COVID-19 should be dealt with where the party receiving the contingent worker’s services is a Central Government Department, an Executive Agency of a Central Government Department or a Non-Departmental Public Body. Read more information on contingent workers impacted by COVID-19. This guidance applies to agency workers paid through PAYE, as well as those paid through umbrella companies on PAYE and off-payroll workers supplying their services through a Personal Service Company (PSC).

Contractors with public sector engagements in scope of IR35 off-payroll working rules (IR35)

Public sector bodies will follow the Crown Commercial Services guidance in the vast majority of cases. In a small number of cases, for example where organisations are not primarily funded by the government and whose staff cannot be redeployed to assist with the coronavirus response, it may be appropriate to claim under the CJRS. Contractors who are deemed employees according to the off-payroll working rules might be eligible for this scheme.

In this scenario, if the public sector organisation wished to furlough a contractor, they would have to confirm this with both the contractor’s Personal Service Company (PSC) and the fee-payer (as set out in the off-payroll working rules, usually the agency paying the contractor’s PSC). It should be formally agreed between these parties that the contractor is to do no work for the public sector organisation during their period of furlough. The fee-payer would be able to apply for the furlough payment of 80% of the monthly contract value, up to a maximum of £2,500, as well as the employer NICs on that subsidised wage. The fee-payer would then pay at least the amount of wage-grant received to the PSC, and report the payment via PAYE using the contractor’s details, making the usual tax and National Insurance contributions (NICs) deductions for contracts in scope of the off-payroll rules. The PSC would then be required to report the amount it pays to the contractor as deemed employment income via PAYE using box 58A on the PAYE Real Time Information return.

Where a contractor is continuing to receive payments from a public sector client (including through the CJRS or other any other scheme), income from this client should be excluded from any calculation of the reference pay for the purposes of the CJRS if the contractor also decides to furlough themselves as an employee or director of their own company.

Employee transfers under TUPE and on a change in ownership

A new employer is eligible to claim under the CJRS in respect of the employees of a previous business transferred after 19th March 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership. Read more guidance on TUPE rules. Read more guidance on business succession.

Payroll Consolidation

Where a group of companies have multiple PAYE schemes and there is a transfer of all employees from these schemes into a new consolidated PAYE scheme after 19 March 2020, the new scheme will be eligible to furlough those employees and claim the grants available under the CJRS.

If your employee does volunteer work

A furloughed employee can take part in volunteer work, if it does not provide services to or generate revenue for, or on behalf of your organisation or a linked or associated organisation. Your organisation can agree to find furloughed employees new work or volunteering opportunities whilst on furlough if this is in line with public health guidance.

If your employee undertakes training

Furloughed employees can engage in training, as long as in undertaking the training the employee does not provide services to, or generate revenue for, or on behalf of their organisation. Furloughed employees should be encouraged to undertake training. Where training is undertaken by furloughed employees, at the request of their employer, they are entitled to be paid at least their appropriate national minimum wage for this time. In most cases, the furlough payment of 80% of an employee’s regular wage, up to the value of £2,500, will provide sufficient monies to cover these training hours. However, where the time spent training attracts a minimum wage entitlement in excess of the furlough payment, employers will need to pay the additional wages (see National Minimum Wage Section for more details).

If your employee is on maternity leave, adoption leave, paternity leave or shared parental leave

The normal rules for maternity and other forms of parental leave and pay apply. You can claim through the scheme for enhanced (earnings related) contractual pay for employees who qualify for either: maternity pay, adoption pay, paternity pay, shared parental pay

Agreeing to furlough employees

Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.

To be eligible for the grant employers must confirm in writing to their employee confirming that they have been furloughed. If this is done in a way that is consistent with employment law, that consent is valid for the purposes of claiming through the scheme. Collective agreement reached between an employer and a trade union is also acceptable for the purpose of such a claim. There needs to be a written record, but the employee does not have to provide a written response. A record of this communication must be kept for five years.

You do not need to place all your employees on furlough. However, those employees who you do place on furlough cannot undertake work for you

Minimum furlough periods

Any employees you place on furlough must be furloughed for a minimum period of 3 consecutive weeks. When they return to work, they must be taken off furlough. Employees can be furloughed multiple times, but each separate instance must be for a minimum period of 3 consecutive weeks.

Before you claim

Work out how much you can claim through the scheme.

Employers should discuss with their staff and make any changes to the employment contract by agreement. Employers may need to seek legal advice on the process. If sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes to procure agreement to changes to terms of employment. To claim, you will need:

  • your employer PAYE reference number
  • the number of employees being furloughed
  • National Insurance Numbers for the employees you want to furlough
  • Names of the furloughed employees
  • Payroll/employee number for the furloughed employees (optional)
  • your Self Assessment Unique Taxpayer Reference, Corporation Tax Unique Taxpayer Reference, Company Registration Number or Employer Name (as appropriate)
  • the claim period (start and end date)
  • amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
  • your bank account number and sort code
  • your contact name
  • your phone number

You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim.

You should retain all records and calculations in respect of your claims, including records of the amount claimed for each furloughed employee and the period for which each employee is furloughed and a claim made under the scheme.

Using an agent to do PAYE online

If you use an agent who is authorised to do PAYE online for you, they will be able to claim on your behalf. If you would like to use an agent, but do not have one authorised to do PAYE online for you, you can do that by accessing your HMRC online services and selecting ‘Manage Account’.

You must be enrolled in PAYE online for employers to do this and will need to ask your agent for their agent ID. Your agent can get this from their HMRC online service for agents by selecting ‘authorise client.’

You can also use this service to remove authorisation from your agent if you do not want it to continue after they have submitted your claim(s). If an agent makes a claim on your behalf you will need to tell them which bank account you would like the grant to be paid into.

If you’re putting 100 or more employees on furlough

If you have fewer than 100 furloughed staff you will be asked to enter details of each employee you are claiming for directly into the system – this will include their name, National Insurance number, claim period and claim amount, and payroll/employee number (optional).

If you have 100 or more furloughed staff you will be asked to upload a file with the information rather than input it directly into the system. HMRC will accept the following file types: .xls .xlsx .csv .ods

The file should include the following information for each furloughed employee: name, National Insurance number, claim period and claim amount, payroll/employee number (optional).

HMRC cannot provide your employees with details of claims you make on their behalf. Please help HMRC by keeping your employees informed, answering any questions that they might have. Please ask them not to contact HMRC.

If you use an agent who is authorised to act for you for PAYE purposes, they will be able to make a claim on your behalf. If you use a file only agent (who files your RTI return but doesn’t act for you on any other matters) they won’t be authorised to make a claim for you and you will need to make the claim yourself. Your file only agent can assist you in obtaining the information you need to claim (which is listed above). HMRC is making the claim process as straightforward as possible.

How much you can claim

HMRC has now moved this section into a separate webpage: Work out 80% of your employees’ wages to claim through the Coronavirus Job Retention SchemeCTG has included it here so charities have all the relevant information in one place.

You can claim for 80% of your employee’s wages (even for employee’s on National Minimum Wage) – up to a maximum of £2,500 per month. You’ll still need to pay employer National Insurance and pension contributions on behalf of your furloughed employees, and you can claim for these too.

You cannot claim for:

  • additional National Insurance or pension contributions you make because you choose to top up your employee’s wages
  • any pension contributions you make that are above the mandatory employer contribution

You can choose to top up your employees’ wages, but you do not have to. Employees must not work or provide any services for the business while furloughed, even if they receive a top-up wage.

Claims should be started from the date that the employee finishes work and starts furlough, not when the decision is made, or when they are written to confirming their furloughed status.

Use the calculator

A calculator has been published to assist you in calculating how much you can claim. Please note that it will not work for all employees at present.

What to include when calculating wages

The amount you should use when calculating 80% of your employees’ wages is regular payments you are obliged to make, including:

  • regular wages you pay to employees
  • non-discretionary overtime
  • non-discretionary fees
  • non-discretionary commission payments
  • piece rate payments

You cannot include the following when calculating wages:

  • payments made at the discretion of the employer or a client – where the employer or client was under no contractual obligation to pay, including:
    • tips
    • discretionary bonuses
    • discretionary commission payments
  • non-cash payments
  • non-monetary benefits like benefits in kind (such as a company car) and salary sacrifice schemes (including pension contributions) that reduce an employees’ taxable pay

The entirety of the grant received to cover an employee’s subsidised furlough pay must be paid to them in the form of money. No part of the grant should be netted off to pay for the provision of benefits or a salary sacrifice scheme.

Where the employer provides benefits to furloughed employees, including through a salary sacrifice scheme, these benefits should be in addition to the wages that must be paid under the terms of the Job Retention Scheme.

Normally, an employee cannot switch freely out of a salary sacrifice scheme unless there is a life event. HMRC agrees that COVID-19 counts as a life event that could warrant changes to salary sacrifice arrangements, if the relevant employment contract is updated accordingly.

Apprenticeship Levy and Student Loans

Both the Apprenticeship Levy and Student Loans should continue to be paid as usual. Grants from the Job Retention Scheme do not cover these.

National Minimum Wage

Individuals are only entitled to the National Living Wage, National Minimum Wage or Apprentices Minimum Wage for the hours they are working or treated as working under minimum wage rules.

This means that furloughed workers who are not working can be paid the lower of 80% of their wages or £2,500 even if, based on their usual working hours, this would be below their appropriate minimum wage.

However, time spent training is treated as working time for the purposes of the minimum wage calculations and must be paid at the appropriate minimum wage, taking into account the increase in minimum wage rates from 1 April 2020. As such, employers will need to ensure that the furlough payment provides sufficient monies to cover these training hours. Where the furlough payment is less than the appropriate minimum wage entitlement for the training hours, the employer will need to pay the additional wages to ensure at least the appropriate minimum wage is paid for 100% of the training time. Where a furloughed worker is paid close to minimum wage levels and asked to complete training courses for a substantial majority of their usual working time, employers are recommended to seek independent advice or contact Acas.

If you’re claiming for a member of a Limited Liability Partnership (LLP)

If a member of an LLP is treated as an employee (because of salaried members rules), you must only include payments that are either:

  • fixed
  • variable, but are varied without reference to the overall amount of the profits or losses of the LLP
  • not affected by the overall amount of the LLP’s profits or losses

Holiday Pay

Furloughed employees continue to accrue leave as per their employment contract. The employer and employee can agree to vary holiday entitlement as part of the furlough agreement, however almost all workers are entitled to 5.6 weeks of statutory paid annual leave each year which they cannot go below.

Employees can take holiday whilst on furlough. Working Time Regulations require holiday pay to be paid at the employee’s normal rate of pay or, where the rate of pay varies, calculated on the basis of the average pay received by the employee in the previous 52 working weeks. Therefore, if a furloughed employee takes holiday, the employer should pay them at 100% of their usual pay in accordance with the Working Time Regulations.

Employers will be obliged to pay the additional 20% over the grant, though will have the flexibility to restrict when leave can be taken if there is a business need. This applies for both the furlough period and the recovery period. If an employee usually works bank holidays then the employer can agree that this is included in the grant payment. If the employee usually takes the bank holiday as leave then the employer would either have to top up their pay to 100% of usual pay, or give the employee a day of holiday in lieu.

During this unprecedented time, HMRC is keeping the policy on holiday pay during furlough under review.

Family-related statutory leave includes maternity leave, paternity leave, shared parental leave, adoption leave, parental bereavement leave and unpaid parental leave. In line with other employees, claims for full or part time employees furloughed on return from family-related statutory leave should be calculated against their salary, before tax, not the pay they received whilst on family-related statutory leave. The same principles apply where the employee is returning from a period of unpaid statutory family-related leave.

Claims for those on variable pay, returning from statutory leave should be calculated using either the:

  • same month’s earning from the previous year
  • average monthly earnings for the 2019 to 2020 tax year

Employees returning to work after being on sick pay

In line with other employees, claims for full or part time employees furloughed on return to work after time off sick should be calculated against their salary, before tax, not the pay they received whilst off sick. Claims for those on variable pay, returning to work after time off sick should be calculated using either the:

  • same month’s earnings from the previous year
  • average monthly earnings for the 2019 to 2020 tax year

Unpaid sabbatical or unpaid leave

If your employee has been on unpaid sabbatical or unpaid leave, you’ll need to use the amount they would have been paid if they were on paid leave when calculating 80% of their wages.

Work out the maximum wage amount you can claim

The maximum wage amount you can claim is £2,500 a month, or £576.92 a week, plus any National Insurance and pension contributions you can claim for. If the length of time you’re claiming for is not one week or one month, you’ll need to use the daily maximum wage amounts to work out the maximum amount you can claim for each employee.

To work out the maximum amount you can claim, multiply the daily maximum wage amount by the number of days your employee is furloughed for in your claim.

Month Daily maxiumum wage amount
March 2020 £80.65 per day
April 2020 £83.34 per day
May 2020 £80.65 per day

If your employee is furloughed over two calendar months, you’ll need to calculate the maximum amount for each calendar month and add them together.

If you’re claiming for multiple pay periods in one claim, you can calculate the total maximum using a mixture of:

  • the daily maximum wage amount
  • the weekly maximum wage amount
  • the monthly maximum wage amount

Example of working out the maximum wage amount for part of a pay period

A Limited company pays all of their employees weekly on each Friday and puts all of their employees on furlough on Wednesday 8 April 2020.

A Ltd will need to calculate the grant using the daily calculation for the first pay period which ends on Friday 10 April 2020. This is £83.34 multiplied by 3 days, which is £250.02.

For the next pay period, 11 April 2020 to 17 April 2020, the maximum amount is £576.92 because the pay period is a whole week, and the employee is furloughed on each day.

A Ltd makes a claim for 8 April 2020 to 17 April 2020. The maximum wage amount that they can claim for is the two amounts added, £826.94.

Work out 80% of your employee’s usual wage

You must use these calculations to work out how much you can claim. A calculator has been launched to assist you in calculating how much you can claim.

The way you should work out 80% of your employee’s usual wages is different depending on the way they’re paid. You must check what you can include as wages first.

Choose the calculation you think best fits the way your employee is paid. For example, if you pay your employee a regular salary, use the calculation for fixed pay amounts. HMRC will not decline or seek repayment of any grant based solely on the particular choice of pay calculation, as long as a reasonable choice of approach is made.

You must pay the full amount of the grant to your employee. Where a claim covers multiple pay periods, this calculation should be done for each and then added together.

Work out 80% of wages for fixed rate full or part time employees on a salary

Where a claim covers multiple pay periods, this calculation should be done for each and then added together. Claim for the 80% of the employee’s wages, from their last pay period before 19 March 2020.

If you have already calculated your claim based on the employee’s wages as of 28 February 2020, and this differs from their wages in their last pay period prior to 19 March 2020, you can choose to still use this calculation for your first claim.

To work out 80% of your employee’s wage:

  1. Start with your employee’s wages, which is their last pay period before 19 March – if you’re claiming for a full pay period, skip to step 4.
  2. Divide by the total number of days in the pay period.
  3. Multiply by the number of furlough days in the pay period.
  4. Multiply by 80%.

Example

Worker started work for B Ltd in 1997 and is paid a regular monthly salary on the last day of each month. The worker agreed to be placed on furlough from 23 March 2020. The worker was paid £2,400 for the last full monthly pay period before 19 March 2020. There are 9 days between 23 March and 31 March.

  1. Start with £2,400 (employee’s wages)
  2. Divide by 31 (the total number of days in March)
  3. Multiply by 9 (the number of furlough days in March)
  4. Multiply by 80% – which is £557.42

If your employee has not been paid for a full pay period up to 19 March 2020

If your employee has not been paid for a full pay period up to 19 March 2020, you’ll need to work out what their usual wages are and then calculate 80%. To do this:

  1. Start with amount they’ve been paid in their last pay period.
  2. Divide by the number of days in their last pay period (including non-working days).
  3. Multiply by the number of days that would have been in that pay period.
  4. Divide by the total number of days in this pay period.
  5. Multiply by the number of furlough days in this pay period.
  6. Multiply by 80%.

Example

Employee started work for B Ltd on 21 February 2020 and is paid on the last day of each month. The employee had not had a full pay period up to 19 March 2020, but was paid £700 as a pro-rata of their salary on 29 February 2020. There are 9 days between 21 February and 29 February. The employee agrees to be furloughed from 25 March 2020. There are 7 days between 25 March and 31 March.

  1. Start with £700 (the amount they were paid in their last pay period)
  2. Divide by 9 (the number of days in their last pay period – including non-working days)
  3. Multiply by 29 (days in February)
  4. Divide by 31 (the total number of days in the March pay period)
  5. Multiply by 7 (the number of furlough days in the March pay period)
  6. Multiply by 80% – which is £509.32

Employees whose pay varies and were employed from 6 April 2019

If the employee has been employed continuously from the start of the 2019 to 2020 tax year, you can claim the highest of either:

  • 80% of the same month’s wages from the previous year (up to a maximum of £2,500 a month)
  • 80% of the average monthly wages for the 2019 to 2020 tax year (up to a maximum of £2,500 a month)

To calculate 80% of the same month’s wages from the previous year:

  1. Start with the amount they earned in the same period last year.
  2. Divide by the total number of days in this pay period – including non-working days.
  3. Multiply by the number of furlough days in this pay period.
  4. Multiply by 80%.

Example of claiming for the same period last year

A Ltd pays an employee on a weekly basis. The employee’s pay period starts on 23 March 2020 and ends on 29 March 2020. The employee was paid £350 for 23 March 2019 to 29 March 2019. The employee was furloughed for the whole week.

  1. Start with £350 (the amount they earned in the same period last year)
  2. Divide by 7 (the total number of days in this pay period)
  3. Multiply by 7 (the number of furlough days in this pay period)
  4. Multiply by 80% – this is £280

To work out 80% of the average monthly wages for the last tax year:

  1. Start with the amount they earned in the tax year up to the day before they were furloughed.
  2. Divide it by the number of days from the start of the tax year – including non-working days (up to the day before they were furloughed, or 5 April 2020 – whichever is earlier).
  3. Multiply by the number of furlough days in this pay period.
  4. Multiply by 80%.

Example of working out 80% of average monthly wages for the last tax year

Worker started work for A Ltd in 2010 and was placed on furlough on 23 March 2020, earning £15,000 between 6 April 2019 and 22 March 2020 inclusive. There are 353 days between 6 April 2019 and 22 March 2020. A Ltd is claiming for 23 March to 31 March 2020. There are 9 days between 23 March and 31 March.

  1. Start with £15,000 (the amount they earned in the tax year up to the day before they were furloughed)
  2. Divide it by 353 (the number of days from the start the tax year, up to the day before they were furloughed)
  3. Multiply by 9 (the number of furlough days in this pay period)
  4. Multiply by 80% – this is £305.95

Employees whose pay varies and who started employment after 6 April 2019

If the employee started their employment after 6 April 2019, claim for 80% of their average monthly wages since they started work until the date they are furloughed, up to a maximum of £2500 per month. To work out 80% of your employee’s average monthly earnings:

  1. Start with the amount they earned in the tax year up to the day before they were furloughed.
  2. Divide it by the number of days they’ve been employed since the start of the tax year – including non-working days (up to the day before they were furloughed or 5 April 2020 – whichever is earlier).
  3. Multiply by the number of furlough days in this pay period.
  4. Multiply by 80%.

Every day or period after the employee commenced employment with the employer is counted in making this calculation. This includes days when no work was undertaken.

Example of working out 80% of average monthly wages for the last tax year

Employee started work for A Ltd in 1 May 2019 and was placed on furlough on 23 March 2020, earning £15,000 between 1 May 2019 and 22 March 2020 inclusive. There are 327 days between 1 May 2019 and 22 March 2020. A Ltd is claiming for 23 March to 31 March 2020. There are 9 days between 23 March and 31 March.

  1. Start with £15,000 (the amount they earned in the tax year up to the day before they were furloughed)
  2. Divide it by 327 (the number of days from the start the tax year, up to the day before they were furloughed)
  3. Multiply by 9 (the number of furlough days in this pay period)
  4. Multiply by 80% – this is £330.28

Work out how much you can claim for employer National Insurance contributions

You can claim reimbursement for the cost of some or all of the Class 1 employer National Insurance contributions paid on the gross pay grant you pay to the employee. You can choose to provide top-up salary in addition to the grant. Employer National Insurance contributions on any additional top-up salary will not be funded through this scheme.

Working out what you can claim

The total grant for employer National Insurance contributions cannot exceed the total amount of employer National Insurance contributions you are due to pay.

In calculating the total employer National Insurance contributions paid in any pay period, the employer should subtract any Employment Allowance used in that pay period. If you have not, or do not expect to pay any employer National Insurance contributions in a pay period as a result of the Employment Allowance, you should not claim any employer National Insurance contributions costs for furloughed employees in that pay period. If you expect to exhaust any Employment Allowance in a pay period then you should claim the lower of the employer National Insurance contributions grant calculation, and the employer National Insurance contributions costs that you paid, or expect to pay across your entire payroll.

The total employer National Insurance contributions due in a pay period should be apportioned on a daily basis, with the amount apportioned to any qualifying furlough days forming the basis of the amount that can be claimed through the scheme.

If your employee is furloughed for the whole pay period, and you do not top up their pay

To work out how much you can claim to cover employer National Insurance contributions:

  1. Start with the grant you’re claiming for employee’s wages.
  2. Minus the relevant secondary National Insurance contributions threshold.
  3. Multiply this amount by 13.8%.
Tax year National Insurance contribution thresholds
2019 to 2020 £166 per week, £719 per month or £8,632 per year
2020 to 2021 £169 per week, £732 per month or £8,788 per year

Example

A Ltd pays employees on a calendar monthly basis. An employee was furloughed on 1 April 2020 is paid £1,500 of furlough pay on 30 April 2020. A Ltd did not top up the employee’s pay.

  1. Start with £1,500 (the grant you’re claiming for employee’s wages)
  2. Minus £732 (the relevant secondary National Insurance contributions threshold)
  3. Multiply this amount by 13.8% – this is £105.98

The total amount of the grant that can be claimed towards employer National Insurance contributions is £105.98 for this employee. A Ltd should also consider whether the claim needs to be adjusted for any amount of Employment Allowance that A Ltd might claim.

If your employee is not furloughed for the whole pay period or you top up their pay

If the pay period covers both furloughed and working periods, or you top up your employees pay over the amounts covered by the grant the following steps will help you calculate the amount of employer National Insurance contributions for each employee:

  1. The amount of pay minus the relevant National Insurance contributions secondary threshold.
  2. To calculate the employer National Insurance contributions due on an employee’s total pay for the pay period, the result of Step 1 is multiplied by 13.8%.
  3. Divide the amount of employer National Insurance contributions due for the pay period by the number of days in the pay period.
  4. The grant is capped at the total amount of employers’ National Insurance contributions due to be paid in respect of an employee. Multiply the result of Step 3 by the number of qualifying furlough days in the pay period.
  5. Multiply the result of Step 4 by the proportion of pay received in respect of the qualifying furlough days that is funded by the grant.

Example

An employee who is paid a fixed amount monthly agrees to be furloughed by A Ltd on 16 April 2020. The employee’s gross pay at the end of the month is £2,160. This is made up of £1,200 of wages funded by A Ltd, in respect of 1 to 15 April (15 days), and £960 of pay wholly funded by a grant in respect of 16 to 30 April (15 days). The total employer National Insurance contributions due for the pay period is apportioned on a daily basis to determine how much can be covered by a grant for employer National Insurance contributions.

  1. £2,160 minus £732 (the amount of pay minus the relevant National Insurance contributions secondary threshold)
  2. Multiply by 13.8% (this gives you the amount employer National Insurance contributions due on an employee’s total pay for the pay period)
  3. Divide by 30 (the number of days in the pay period)
  4. Multiply by 15 (the number of furlough days in the pay period)
  5. Multiply by 100% (because the employee’s wage is not being topped up) – this is £98.53

A Ltd can claim £98.53 in respect of the employer National Insurance contributions due on the employee’s March pay. The total grant for employer National Insurance contributions cannot exceed the total amount of employer National Insurance contributions due to be paid.

Example

If A Ltd chooses to top up the same employee’s pay to 100% during the period of furlough, the employer National Insurance contributions must be apportioned between the pay funded by the grant and the pay funded by the employer. The employee’s total pay in this example is £1,200 in respect of 1 to 15 April and £1,200 (made up of £960 grant-funded pay and £240 employer-funded pay) in respect of 16 to 30 April, totalling £2,400.

  1. £2,400 minus £732 (the amount of pay minus the relevant National Insurance contributions secondary threshold)
  2. Multiply by 13.8% (this gives you the amount employer National Insurance contributions due on an employee’s total pay for the pay period)
  3. Divide by 30 (the number of days in the pay period)
  4. Multiply by 15 (the number of furlough days in the pay period) Step 5: Multiply by £960 / £1,200 (this is the furlough pay received for the furlough period divided by the total pay received for the furlough period) – this equals £92.07

A Ltd can claim £92.07 in respect of the employer National Insurance contributions due on the employee’s March pay. The total grant for employer National Insurance contributions cannot exceed the total amount of employer National Insurance contributions due to be paid.

Before you claim for employer National Insurance contributions

Employer National Insurance contributions is payable on all pay over the secondary threshold at a rate of 13.8%. Employers may be eligible for the Employment Allowance. In the 2019 to 2020 tax year the allowance was £3,000 and was available to all employers. From 6 April 2020 the Employment Allowance is £4,000 but is only available to employers whose Employer Secondary National Insurance contributions liability in the previous year was under £100,000.

Employers can use the Employment Allowance to reduce their employer National Insurance contributions bill across each payroll until the allowance is exhausted or the end of the tax year, whichever comes first.

No employer National Insurance contributions due

If there is no employer National Insurance contributions due then the amount of the grant towards employer National Insurance contributions is zero. This could be the case for:

  • apprentices under 25 (category H)
  • employees under 21 (category M)
  • employees under 21 who can defer NI because they’re already paying it in another job (category Z)
  • employers whose employer National Insurance contributions bill is reduced to £0 by the Employment Allowance

Work out how much you can claim for employer’s pension contributions

You’ll still need to pay pension contributions on behalf of your furloughed employees, and you can claim for these up to the level of the mandatory employer contribution, even if it’s not an auto-enrolment pension. You cannot claim for any pension contributions:

You’ll need to work out how much you can claim for employer’s pension contributions.

  1. Start with the amount you’re claiming for the employee’s wages.
  2. Deduct the minimum amount your employee would have to earn in the claim period to qualify for employer pension contributions – this is £512 a month for periods before 5 April 2020, and £520 a month for periods after 6 April 2020.
  3. Multiply by 3%.

Grants for pension contributions can be claimed up to this cap provided the employer pays the whole amount claimed to a pension scheme for the employee as an employer contribution.

Example if employee is furloughed for the whole pay period, and you do not top up their pay

A Ltd pays employees on a monthly basis. An employee was furloughed on 1 April 2020 and is paid £1,500 of furlough pay on 30 April 2020. A Ltd did not top up the employee’s pay. A Ltd pays employer pension contributions into the employee’s pension.

  1. Start with £1,500 (this is the gross pay grant)
  2. Deduct £520 (this is the Lower Level of Qualifying Earnings)
  3. Multiply by 3% = £29.40

A Ltd can claim £29.40 towards employer contributions it makes into the employee’s pension.

Example – employer makes contributions above the minimum level of contributions for an auto-enrolment pension

A salaried employee of A Ltd earns £2,125 per month, and is furloughed from 1 May 2020 to 31 May 2020. A Ltd has agreed to top up the employee’s salary to its usual amount, including making employer pension contributions which are usually 3% of the employee’s entire salary. The amount of gross pay grant is 80% of £2,125, which is £1,700.

The grant that can be claimed towards the employer pension contributions is the lower of the minimum level of contributions for an auto-enrolment pension, based on the furlough payment, and the amount actually paid by A Ltd.

The minimum level of auto-enrolment contributions is:

  1. Start with £1,700 (this is the gross pay grant)
  2. Deduct £520 (this is the Lower Level of Qualifying Earnings)
  3. Multiply by 3% = £35.40

The total employer pension contribution made by A Ltd under the terms of the pension scheme is the gross pay to the employee of £2,125 multiplied by 3%, which equals £63.75.

As A Ltd can only claim the lower of the minimum level of contributions for an auto-enrolment pension (based on the furlough payment) and the amount actually paid into the employee’s pension, they can claim £35.40 to cover employer pension contributions.

Example of how to calculate the grant towards employer pension contributions where the employee is furloughed during the pay period

Where an employee is paid for a pay period where only some of the days are furlough days then the Lower Level of Qualifying Earnings should be apportioned on a daily basis. A Ltd pays employees on the last day of every month. A Ltd pays employer pension contributions into employees’ pensions in line with the minimum level of contributions for an auto-enrolment pension.

An employee agrees to be furloughed from 16 April 2020. Their April 2020 gross pay is £1,501.20. This is made up of £810 which they earned before being furloughed, and £691.20 of furlough pay. The amount of the grant which A Ltd can claim towards their employer pension contributions is:

  1. Start with £691.20 (this is the furlough pay)
  2. Deduct £260 (this is a proportion of the Lower Level of Qualifying Earnings)
  3. Multiply by 3% = £12.94

The minimum level of auto-enrolment pension contributions on the furlough pay is £12.94. A Ltd can claim for the lower of £12.94 or the employer pension contributions due on the furlough pay under the terms of the pensions scheme. in respect of the furlough pay.  The Lower Level of Qualifying Earnings in this example is calculated as £520 divided by 30 days (the number of days in April), and then multiplied by 15 days (the number of days that the employee is furloughed in April).

How to claim

You can claim for wages online through the Coronavirus Job Retention Scheme. You’ll need the Government Gateway user ID and password you got when you registered for PAYE online. Online services may be slow during busy times. Check if there are any problems with this service.

You can only claim for periods when your employee was on furlough.

It is for you to decide the length of your claim period. In deciding what your claim period is, you should think about how frequently you run your payroll. The length of claim period will be different for different employers.

You cannot make more than one claim during a claim period – – this means you should include all of the employees that you want to furlough for that claim period, because you will not be able to make another claim for the same period or one that overlaps.

You must claim for all employees in each period at one time – you cannot make changes to your claim. It is not possible to amend a claim once it is submitted. HMRC are looking to develop a process to allow for amendments to be made.

You can make your claim in anticipation of an imminent payroll run, at the point you run your payroll or after you have run your payroll . Claims can be backdated from 1 March 2020 where employees have already been furloughed from that date. A claim cannot start any earlier than the date the employee was first furloughed.

You must pay the full amount you are claiming to your employee, even if your company is in administration. If you’re not able to do that, you’ll need to repay the money back to HMRC. The same applies in relation to employer national insurance contributions and pension contributions you claim regarding your employee. The full amount you claim in respect of these must be paid or you will need to repay the money back to HMRC.

By making a claim, you agree that:

  • the grant you receive can only be used to pay your employee’s salary and the employer national insurance contributions and pension contributions you must pay in relation to the salary paid to your employee
  • you will return any grants back to HMRC immediately if you’re unwilling or unable to use it to pay your employee’s salary and the employer national insurance contributions and pension contributions

You must not make the claim if you do not accept that you can only use the money you claim for making those payments and that it must be returned to HMRC if you do not.

After you’ve claimed

HMRC will check your claim, and if you’re eligible, pay it to you by BACS to a UK bank account. You must pay the employee all the grant you receive for their gross pay in the form of money. Furloughed staff must receive no less than 80% of their reference pay (up to the monthly cap of £2500). Employers cannot enter into any transaction with the worker which reduces the wages below this amount. This includes any administration charge, fees or other costs in connection with the employment.

When the government ends the scheme

When the government ends the scheme, you must make a decision, depending on your circumstances, as to whether employees can return to their duties. If not, it may be necessary to consider termination of employment (redundancy).

Tax Treatment of the Coronavirus Job Retention Grant

Payments received by a business under the scheme are made to offset these deductible revenue costs. They must therefore be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles. Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes. Individuals with employees that are not employed as part of a business (such as nannies or other domestic staff) are not taxable on grants received under the scheme. Domestic staff are subject to Income Tax and National Insurance Contributions on their wages as normal.

Reporting payments in PAYE Real Time Information from the Coronavirus Job Retention Scheme

If you have not already, claim for your employees’ wages.

If you’re using the grant to pay wages

Any grant paid to you, is to be used to pay wages to your furloughed employees and should be treated in the same way as any wage payment and is subject to all payroll deductions. You should pay employees on their contractual payment date so that employees receiving Universal Credit are not affected. The grant should be reported to HMRC via Real Time Information through your payroll software, on or before the date that it is paid to your employees.

If you’re using the grant to reimburse wages already paid

If you have continued to pay your employees during a period of furlough, in advance of receiving any payments under the scheme, you do not need to make another Full Payment Submission for this amount. This is because the furlough grant is reimbursing the wages you have already paid out and already reported through your payroll.

If you’re in a different situation

If you have not paid any of your employees any wage payments in a tax month

You must submit an Employer Payment Submission stating you have not paid any employees in that tax month. The Employer Payment Submission should be sent no later than 19th of the following tax month where possible. Do not submit a nil Full Payment Submission.

If you only pay your employees 20% of their normal wage until the Coronavirus Job Retention Scheme grant payment is received

You must operate PAYE, deducting any tax and National Insurance contributions due on the reduced salary payment amounts and you must report these payments by sending a Full Payment Submission to HMRC on or before the payment date. You must not send the Full Payment Submission reporting the full payments you expected to make, but have not yet made. When you pay wages to your employees after receiving the grant payment, you must send the Full Payment Submission showing the payment that you made.

If you reported wages to HMRC in March 2020 that you did not pay to your employees

The Full Payment Submission must only include wages you have actually paid to your employees. You will need to submit an Earlier Year Update or closed year Full Payment Submission to reflect what you paid in wages. When you receive the grant to pay as wages, you should pay your employees on their contractual payment date for the current tax month. You should also submit a 2020-2021 Full Payment Submission, on or before the date you make the payments to your employees. You must pay employees on their contractual payment date so that employees receiving Universal Credit are not affected by this.

If you pay the full amount of an employee’s normal wage during furlough, but only claim back 80% from HMRC

If you choose to top-up employee wages above the 80% scheme grant, that is your choice and at your own expense. You must deduct tax and National Insurance Contributions on the full amount paid and report this payment via a Full Payment Submission on or before the pay date. When the grant is paid by HMRC it will reimburse the wages already paid. You do not need to make another Full Payment Submission for this amount.

If you have not paid anything to your employees for March or April

If you are making a payment for March and April in your employee’s April wage, you must deduct tax and National Insurance Contributions on that full amount. You must not back date the March payment as if it was paid in March.

If you have paid your employees and submitted your Real Time Information submission early

You should continue paying your employees on their contractual payment date and submit the Full Payment Submission on or before the date that you make the payment. You must do this so that employees receiving Universal Credit are not affected.

When your employees are on furlough

You cannot ask your employee to do any work that:

  • makes money for your organisation or any organisation linked or associated with your organisation
  • provides services for your organisation or any organisation linked or associated with your organsation

They can take part in volunteer work or training.

Employee taxes

Your employees will still pay the taxes they normally pay out of their wages. This includes pension contributions (both employer contributions and automatic contributions from the employee), unless the employee has opted out or stopped saving into their pension.

Employee rights

Employees still have the same rights at work, including: Statutory Sick Pay, maternity and other parental rights, rights against unfair dismissal and redundancy payments. Grants cannot be used to substitute redundancy payments. HMRC will continue to monitor businesses after the scheme has closed.

Working for a different employer

If contractually allowed, your employees are permitted to work for another employer whilst you have placed them on furlough. For any employer that takes on a new employee, the new employer should ensure they complete the starter checklist form correctly. If the employee is furloughed from another employment, they should complete Statement C.

Tax Treatment of the Coronavirus Job Retention Grant

Payments received by a business under the scheme are made to offset these deductible revenue costs. They must therefore be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles. Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes. Individuals with employees that are not employed as part of a business (such as nannies or other domestic staff) are not taxable on grants received under the scheme. Domestic staff are subject to Income Tax and National Insurance Contributions on their wages as normal.

Step by Step guide for employers claiming under the Job Retention Scheme

Step 1: Essential information

You must read the guidance set out here before you proceed with your claim. Further advice is also available in pre-recorded webinars on HMRC’s YouTube channel. The service is designed to be simple to use. The information you will be required to provide should be details that you currently use for your payroll run. To help you get through the process as smoothly as possible, please ensure you have all the information required in steps 2 and 3 before you make your claim online. It is the claimant’s responsibility to ensure that the information provided in the application is accurate. You cannot make more than one claim during a claim period – you should make your claim shortly before or during running payroll. You must claim for all employees in each period at one time as you cannot make changes to your claim.

Step 2: Before you make your claim

Getting ready to make your application

The scheme opened on 20 April for claims. You will receive payment six working days after making an application. If you wish to receive a payment from the scheme by the end of the month, you will need to submit your claim at least six working days in advance for the money to clear into your bank account. If you have an authorised agent, decide whether you want to make your own claim or if you want your agent to act on your behalf.

Applying through an agent

If you have an agent that has authorisation to act for you on PAYE matters online, they can make a claim for CJRS on your behalf. If an agent is making the claim for you, tell them which bank account you want the funds to be paid into.

To make a claim yourself, you must gather the following information before you can proceed to step 3:

  1. The number of employees being furloughed
  2. The dates employees have been furloughed to and from
  3. Details of employees – the name andNational Insurance Number of each furloughed employee
  4. Your employer PAYE scheme reference number
  5. Your Corporation Tax Unique Taxpayer Reference, Self-Assessment Unique Taxpayer Reference or Company Registration Number or Employer Name as appropriate for your entity
  6. Your UK bank account details
  7. Your organisation’s registered name
  8. Your organisation’s address

You should make sure you have this information ready before you access the system to make a claim.

Step 3: Calculating a claim

For the majority of employers with full-time or part-time employees on a set salary, you will need to work out the following for the claim period:

  1. The total amount being paid to furloughed employees (up to 80% of £2,500 a month before tax per employee)
  2. The total employer NICs
  3. The total employer pension contributions (up to 3%)

HMRC has also published a calculator, to allow you to check your claim. If you have an agent (including file-only agents or payroll providers), they should be able to assist with calculating your claim.

Step 4: Making a claim

Do not start a claim until you have gathered all the information required in steps 2 and 3.

To access the system on GOV.UK you or your agent will need to have:

  • A Government Gateway ID and password
  • An active PAYE enrolment

If you do not have these, you can register for them at

The application needs to be done in one session. There is currently no save and return option. Sessions will time out after 30 minutes of inactivity.

Now you are ready to make a claim. Go to GOV.UK to make your claim

The service will be available for claim submissions from 20 April. You will not be able to access it before this date. You will be taken through a series of steps in the online service. You will need to confirm that you have furloughed your employees, then you will need to input the information about your organisation which you prepared in step 2.

After this, you will need to confirm the amount of the claim – split into the total amount to be paid to furloughed employees and the total pension and national insurance contributions, that you will have prepared at step 3. Before you submit the application, you will also need to confirm your employees’ details, enter your UK bank details and your address.

Once you have submitted the claim, you will see a confirmation screen where a claim reference number will be provided. Print the confirmation screen or note down the claim reference number provided – you will not receive an email confirmation.

If you are submitting the claim yourself, it is your responsibility to check the accuracy of your claim.

If you are using an agent, ask them to note down and share the calculations that form the basis for your claim and the claim reference number provided. They will not receive an email confirmation, but they can print the confirmation screen.

To ensure that the funds are paid as quickly as possible to you, your agent should input your bank details into the system, not theirs.

If you are an employer with more than 100 employees you will need to provide more detail in your submission:

  • Claim amount per furloughed employee
  • Claim period for each furloughed employee

You will also need to upload the claim information in one of the following formats: XLS, XLSX, CSV, ODP

Step 5: What to do next

  1. HMRC will verify your claim and you will receive the funds in six working days. To help us to support as many businesses as possible, please do not contact HMRC before six working days have passed as we will not be able to help you with your claim.
  2. Keep hold of your claim reference number – one way of doing this is to print out the confirmation screen.
  3. You should retain calculations that form the basis of your claim in case further information is required by HMRC
  4. Tell your furloughed employees that you have made a claim and that they do not need to take any further action. They should not contact HMRC to check the status of a claim as we will not be able to provide them with that information.
  5. For any further information, please read the guidance on GOV.UK
  6. Only call HMRC if you cannot find what you need on GOV.UK – this will leave the helplines open for those who need HMRC’s help most. HMRC will check claims made through the scheme.
  7. Payments may be withheld or may need to be repaid in full to HMRC if the claim is based on dishonest or inaccurate information or found to be fraudulent. Dishonest or deliberately fraudulent claims put our essential public services and the protection of livelihoods at risk during these challenging times.

This product will be reviewed for accessibility and will be made fully accessible shortly

Guidance for employees

If you and your employer both agree, your employer might be able to keep you on the payroll if they’re unable to operate or have no work for you to do because of coronavirus (COVID-19). This is known as being ‘on furlough’. Your employer could pay 80% of your regular wages through the Coronavirus Job Retention Scheme, up to a monthly cap of £2,500. You’ll still be paid by your employer and pay taxes from your income. You cannot undertake work for your employer while on furlough. HMRC expect the scheme to be up and running by the end of April.

The Coronavirus Job Retention Scheme forms part of a collective national effort to protect people’s jobs. Employees can play a vital role by reporting fraudulent claims to HMRC. Fraudulent claims risk the provision of public services and the protection of livelihoods. If you’re concerned that your employer is abusing the scheme you should report them. This could include your employer claiming on your behalf and not paying you what you’re entitled to, being asked to work whilst on furlough, or making a backdated claim that includes times when you were working.

Check if you’re eligible

Your employer is responsible for claiming through the Job Retention Scheme on your behalf and for paying you what you are entitled to. You cannot apply for the scheme yourself.

Both you and your employer must agree to put you on furlough – so speak to your employer about whether they can claim. If your employer and a trade union reach collective agreement that is also acceptable, for the purpose of your employer claiming through the scheme. Once agreed your employer must confirm in writing that you have been furloughed to be eligible to claim. Contact your employer if you do not receive confirmation.

Any employer with a UK payroll and a UK bank account will be able to claim, but you must have been on your employer’s PAYE payroll before or on 19 March 2020 and notified to HMRC on an RTI submission on or before 19 March 2020. This means your employer must have made an RTI submission notifying payment in respect of you to HMRC on or before 19 March 2020. If you were employed as of 28 February 2020 and on payroll (i.e. notified to HMRC on an RTI submission on or before 28 February) and were made redundant or stopped working for your employer prior to 19 March 2020, you can also qualify for the scheme if your employer re-employs you and puts you on furlough

You can be on any type of contract, including a zero-hour contract or a temporary contract. You can be furloughed under the scheme if you are a foreign national. This scheme does not apply if you are self-employed or to any income from self-employment. You may qualify for support under the self-employment income support scheme.

If you’re on sick leave or self-isolating because of coronavirus (COVID-19), speak to your employer about whether you’re eligible – you should get Statutory Sick Pay (SSP) while you are on sick leave or self-isolating, but can be furloughed after this.

If you are shielding in line with public health guidance or required to stay home due to an individual in your household shielding and are unable to work from home, then you should speak to your employer about whether they plan to place staff on furlough.

If you are unable to work, including from home, due to caring responsibilities arising from coronarivus (COVID-19), such as caring for children who are at home as a result of school and childcare facilities closing, or caring for a vulnerable individual in your household, then you should speak to your employer about whether they plan to place staff on furlough. The grant will start on the day you were placed on furlough and this can be backdated to 1 March 2020.

If you were made redundant or stopped working for your employer after 28 February 2020

Your employer can agree to re-employ you and place you on furlough. This applies if you were made redundant or stopped working for them after 28 February, even if they do not re-employ you until after 19 March. They’ll still be able to claim a grant to cover 80% of your regular wages, up to a monthly cap of £2,500. This applies as long as you were on their payroll as at 28 February and had been notified to HMRC on an RTI submission on or before 28 February 2020. This means an RTI submission notifying payment in respect of you to HMRC must have been made on or before 28 February 2020.

Find out what happens if you stopped working for your employer and were on a fixed term contract.

If you were made redundant or stopped working for your employer after 19 March 2020

Your employer can agree to re-employ you and place you on furlough. They’ll still be able to claim a grant to cover 80% of your regular wages from the date you were placed on furlough, up to a cap of £2,500 a month. This applies if you were made redundant or stopped working for them after 19 March 2020, as long as you were employed by them on 19 March 2020 and on their payroll on or before 19 March 2020. This means an RTI submission notifying payment in respect of you to HMRC must have been made on or before 19 March 2020.

If you’re on a fixed term contract

If you were on a fixed term contract your employer can re-employ, furlough and claim for you if your contract expired after either:

  • 28 February 2020 and an RTI payment submission for you was notified to HMRC on or before 28 February 2020
  • 19 March 2020 and an RTI payment submission for you was notified to HMRC on or before 19 March 2020

If your fixed term contract has not already expired, your employer can extend or renew it. Your employer can claim for you if an RTI payment submission for you was notified to HMRC on or before 19 March 2020.

If you started and ended the same contract between 28 February 2020 and 19 March 2020 you will not qualify for this scheme. This is not specific to employees on fixed-term contracts, the same would apply to employees on all other contracts.

If you currently have more than one employer

You can be put on furlough by one employer and continue to work for another. If you’re put on furlough by more than one employer, you’ll receive separate payments from each employer. The 80% of your regular wage up to a £2,500 monthly cap applies to each job. If you have had multiple employers over the past year, have only worked for one of them at any one time, and are being furloughed by your current employer, you cannot be furloughed by your previous employer.

If you are on Universal Credit

If you’re earning less because you’re on furlough, your Universal Credit payment might change – find out how earnings affect your payments.

If you are on maternity leave, adoption leave, paternity leave or shared parental leave

The normal rules for maternity and other forms of parental leave and pay apply.

Your employer can claim through the scheme for enhanced (earnings related) contractual pay for employees who qualify for either: maternity pay, adoption pay, paternity pay, shared parental pay.

If you are pregnant and about to start maternity leave

You should start maternity leave as normal. If your earnings have reduced because you were put on furlough or off sick before your maternity leave started, this may affect your Statutory Maternity Pay. The same rules apply to adoption pay, paternity pay and shared parental pay.

If you’re employed by an individual

If you’re employed by an individual (for example, as a nanny) then your employer can furlough you under the scheme if you are paid through PAYE and were on their payroll on or before 19 March 2020. This means your employer must have made an RTI submission notifying payment in respect of you to HMRC on or before 19 March 2020

If you’re an apprentice

Apprentices can be furloughed in the same way as other employees and continue to train. You must be paid at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage as appropriate, for all of the time you spend training, even if this is more than 80% of your normal wages.

If you’re a public sector employee

The government expects that the scheme will not be used by many public sector organisations, as the majority of public sector employees are continuing to provide essential public services or contribute to the response to the coronavirus outbreak. Where employers receive public funding for staff costs, and that funding is continuing, we expect employers to use that money to continue to pay staff in the usual fashion – and correspondingly not furlough them. This also applies to non-public sector employers who receive public funding for staff costs. Organisations who are receiving public funding specifically to provide services necessary to respond to COVID-19 are not expected to furlough staff.

In a small number of cases, for example where organisations are not primarily funded by the government and whose staff cannot be redeployed to assist with the coronavirus response, the scheme may be appropriate for some staff. If you work for the public sector, you can get more information about how the scheme works for you from your UK Government Department, employer or, in the case of employers funded by the Scottish Government, Welsh Government or Northern Ireland Executive, through your respective administration.

Other specific categories

You may be eligible to be furloughed, and receive a grant of 80% of your regular wages up to a monthly cap of £2500, if you are paid via PAYE and are in one of the following categories: you are an agency worker, you are a company director, you are a salaried member of a Limited Liability Partnership, you are a Limb (b) worker, you are an office holder

How much you’ll get

If you are a full-time or part-time employee on a salary, then your monthly wages are based on your salary. You should speak to your employer for further information about how they will calculate this.

If your pay varies and you’ve been employed (or engaged by an employment business in the case of agency workers) for a full year, employers will claim for the higher of either:

  • the amount you earned in the same month last year
  • an average of your monthly earnings from the last year

If your pay varies and you’ve been employed for less than a year, employers will claim for an average of your regular monthly wages since you started work.

If you have been working for less than a month, your employer will pro-rata your earnings from that month.

The grant paid to your employer will be calculated based on your regular, contractual pay, such as wages, compulsory commission and past overtime. The calculation will not include discretionary commission (including tips) payments or bonuses, non-cash payments or benefits in kind.

HMRC agrees that COVID-19 counts as a life event that could warrant changes to salary sacrifice arrangements, if the relevant employment contract is updated accordingly. If you want to switch out of a salary sacrifice scheme as a result of COVID-19, you should speak to your employer.

Holiday pay

Whilst furloughed you will continue to accrue leave as per your employment contract. You can agree with your employer to vary holiday pay entitlement as part of the furlough agreement, however almost all workers are entitled to 5.6 weeks of statutory paid annual leave each year which they cannot go below.

You can take holiday whilst on furlough. Working Time Regulations (WTR) require holiday pay to be paid at your normal rate of pay or, where your rate of pay varies, calculated on the basis of the average pay you received in the previous 52 working weeks. Therefore, if you take holiday while on furlough, your employer should pay you your usual holiday pay in accordance with the WTR. Employers will be obliged to pay the additional amounts over the grant, though will have the flexibility to restrict when leave can be taken if there is a business need. This applies for both the furlough period and the recovery period.

If you usually work bank holidays then your employer can agree that this is included in the grant payment. If you usually take the bank holiday as leave then your employer would either have to top up your pay to your usual holiday pay, or give you a day of holiday in lieu.

During this unprecedented time, HMRC is keeping the policy on holiday pay during furlough under review.

Family related statutory leave includes maternity leave, paternity leave, shared parental leave, adoption leave, parental bereavement leave and unpaid parental leave.

In line with other employees, if you are a full or part time employee furloughed on return from family related statutory leave your employer should calculate the grant against your salary, before tax, not the pay you received whilst on family related statutory leave.

If your pay varies, and you are furloughed on your return from statutory leave your employer should calculate the grant using either the:

  • same month’s earnings from the previous year
  • average monthly earnings for the 2019 – 2020 tax year

Employees returning to work after being on sick pay

In line with other employees, on return to work after time off sick, your employer will calculate how much you’ll receive against your salary, before tax, not the pay you received whilst off sick.

If you are on variable pay and returning to work after time off sick, your employer will calculate how much you’ll get using either the:

  • same month’s earnings from the previous year
  • average monthly earnings for the 2019 – 2020 tax year

While you’re on furlough

Once you are on furlough you will not be able to work for your employer. You can undertake training or volunteer subject to public health guidance, as long as you’re not:

  • making money for your employer or a company linked or associated to your employer
  • providing services to your employer or a company linked or associated to your employer

If workers are required to, for example, complete training courses whilst they are furloughed, then they must be paid at least their appropriate minimum wage (NLWNMW or AMW) for the time spent training, even if this is more than the 80% of their wage that will be subsidised. Whilst furloughed your employer cannot ask you to do work for another linked or associated company.

If your contract allows, you may undertake other employment while your current employer has placed you on furlough, and this will not affect the grant that they can claim under the scheme. You will need to be able to return to work for the employer that has placed you on furlough if they decide to stop furloughing you, and you must be able to undertake any training they require while on furlough. If you take on new employment, you should make sure you complete the starter checklist form with your new employer correctly. If you are furloughed from another employment, you should complete Statement C. Any activities undertaken while on furlough must be in line with the latest Public Health guidance during the COVID-19 outbreak.

Your employer can still make you redundant while you’re on furlough or afterwards. Your rights as an employee are not affected by being on furlough, including redundancy rights. If your employer chooses to place you on furlough, you will need to remain on furlough for a minimum of 3 consecutive weeks. However, your employer can place you on furlough more than once, and one period can follow straight after an existing furlough period, while the scheme is open. The scheme will be open for at least 4 months.

If you do not want to go on furlough

If your employer asks you to go on furlough and you refuse you may be at risk of redundancy or termination of employment, depending on the circumstances of your employer. However, this must be in line with normal redundancy rules and protections.

Guidance for specific customers

If you’re an agency worker (including if you are employed by an umbrella company)

Where agency workers are paid through PAYE, they are eligible to be furloughed and receive support through this scheme, including where they are employed by umbrella companies. Furlough should be agreed between the agency, as the deemed employer, and the worker. As with employees, agency workers should perform no work for, through, or on behalf of the agency that has furloughed them while they are furloughed, including for the agency’s clients. Where an agency supplies clients with workers who are employed by an umbrella company that operates the PAYE, it will be for the umbrella company and the worker to agree whether to furlough the worker or not.

If you’re an office holder

If you are an office holder who is remunerated by PAYE then you can be furloughed and receive support through this scheme. The furlough, and any ongoing payment during furlough, will need to be agreed between you and the party who operates PAYE on the income they receive for holding their office. Where you are a company director or member of a Limited Liability Partnership (LLP), the furlough arrangements should be adopted formally as a decision of the company or LLP.

If you’re a company director

As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duties to their company which are set out in the Companies Act 2006. Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would be judged reasonably necessary for the purposes, such as, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company. This also applies to salaried individuals who are directors of their own personal service company (PSC).

If you’re a contractor with public sector engagements in scope of IR35 off-payroll working rules (IR35)

Public sector bodies will follow the Crown Commercial Services guidance in the vast majority of cases. In a small number of cases, for example where organisations are not primarily funded by the government and whose staff cannot be redeployed to assist with the coronavirus response, it may be appropriate to claim under the CJRS. Contractors who are deemed employees according to the off-payroll working rules can be eligible for this scheme.

In this scenario, if the public sector organisation wished to furlough a contractor, they would have to confirm this with both the contractor’s Personal Service Company (PSC) and the fee-payer (as set out in the off-payroll working rules, usually the agency paying the contractor’s PSC). It should be formally agreed between these parties that the contractor is to do no work for the public sector organisation during their period of furlough. The fee-payer would be able to apply for the furlough payment of 80% of the monthly contract value, up to a maximum of £2,500, as well as the employer NICs on that subsidised wage. The fee-payer would then pay at least the amount of wage-grant received to the PSC, and report the payment via PAYE using the contractor’s details, making the usual tax and National Insurance contributions (NICs) deductions for contracts in scope of the off-payroll rules. The PSC would then be required to report the amount it pays to the contractor as deemed employment income via PAYE using box 58A on the PAYE Real Time Information return.

Where a contractor is continuing to receive payments from a public sector client (including through the CJRS or other any other scheme), income from this client should be excluded from any calculation of the reference pay for the purposes of the CJRS if the contractor also decides to furlough themselves as an employee or director of their own company.

If you’re a Limb (b) Worker

Where Limb (b) Workers are paid through PAYE, they can be furloughed and receive support through this scheme. Those who pay tax on their trading profits through Income Tax Self-Assessment, may instead be eligible for the Self-Employed Income Support Scheme (SEISS), announced by the Chancellor on 26 March 2020. Read more about the about the SEISS, including the eligibility criteria and how to claim.

If you’re a contingent worker in the public sector

The Cabinet Office has issued guidance on how payments to suppliers of contingent workers impacted by COVID-19 should be dealt with where the party receiving the contingent worker’s services is a Central Government Department, an Executive Agency of a Central Government Department or a Non-Departmental Public Body. Read more information on contingent workers impacted by COVID-19. This guidance applies to agency workers paid through PAYE, as well as those paid through umbrella companies on PAYE and off-payroll workers supplying their services through a Personal Service Company (PSC).

Treasury Direction to HMRC on the Job Retention Scheme

The Chancellor has made a Treasury Direction (full details below). under Sections 71 and 76 of the Coronavirus Act 2020 setting out that HMRC is responsible for the payment and management of amounts to be paid under the Coronavirus Job Retention Scheme, as set out in the Schedule to the Direction, which sets out the legal framework for the Scheme. Things to note that are not highlighted in the guidance include:

  • If an employer has more than one qualifying PAYE scheme
    • the employer must make a separate claim in relation to each scheme, and
    • the amount of any payment under CJRS will be calculated separately in relation to each scheme.
  • An employee has been instructed by the employer to cease all work in relation to their employment only if the employer and employee have agreed in writing (which may be in an electronic form such as an email) that the employee will cease all work in relation to their employment
  • CJRS has effect only in relation to amounts of earnings paid or payable by employers to furloughed employees in respect of the period beginning on 1 March 2020 and ending on 30 June 2020 and employer national insurance contributions and directed pension payments paid or payable in relation to such earnings.